ATTORNEY GENERAL OF THE STATE OF NEW YORK
LABOR BUREAU
IN THE MATTER OF THE INVESTIGATION OF
ELIOT SPITZER, ATTORNEY GENERAL OF THE ASSURANCE OF
STATE OF NEW YORK OF DISCONTINUANCE
PURSUANT TO
ADVANCED CONTRACTING CORP.; and REFLEX EXECUTIVE LAW § 63(15)
SERVICES, INC.
WHEREAS, pursuant to the provisions of Executive Law § 63(12) and Article 19 of
Labor Law, Eliot Spitzer, Attorney General of the State of New York, (hereinafter “OAG”)
commenced an investigation in April 2005 into allegations that individuals performing labor at
work sites contracted by Advanced Contracting Corp. and Reflex Services, Inc.. (collectively,
the “Respondents”), were not paid time and one-half their regular hourly rate of pay for hours
worked in excess of 40 in a work week (“overtime”) in violation of 12 NYCRR § 142-2.2.
WHEREAS, based upon the OAG’s investigation of the Respondents, the OAG
determined that individuals performing labor at work sites contracted by the Respondents, and
who had been referred to such work sites by a staffing service, had repeatedly worked hours in
excess of 40 in a work week and had not been paid overtime.
WHEREAS, the Respondents have cooperated with the OAG in its investigation of the
Respondents.
WHEREAS, the Respondents by their attorneys, Littler Mendelson, P.C., 885 Third
Avenue, New York, New York 10022, have advised OAG of their desire and agreement to
resolve the investigation without litigation.
WHEREAS, the Respondents deny that they are the employer of the individuals who
performed labor at work sites contracted by the Respondents that had repeatedly worked hours in
1
excess of 40 in a work week and had not been paid overtime
WHEREAS, OAG accepts this Assurance pursuant to Executive Law § 63(15) in lieu of
commencing or causing to be commenced any judicial proceeding or prosecution pursuant to
Executive Law § 63(12), Article 19 of the Labor Law, or the Fair Labor Standards Act,
concerning the payment of overtime wages to individuals performing labor at work sites
contracted by the Respondents from the week ending December 28, 1999 to the week ending
March 29, 2005.
AND WHEREAS, the execution of this Assurance shall not be deemed or construed to be
an admission by the Respondents of any violation of Article 19 of the Labor Law, 12 NYCRR
Part 142; or the Fair Labor Standards Act of 1938, as amended.
IT IS HEREBY AGREED:
Prospective Relief
1. The Respondents, upon signing this Assurance, will pay the OAG the sum of $495,876.70
plus an additional $10,000.00 in costs to the OAG for a total settlement amount of
$505,876.70. The total settlement amount shall be made by certified or bank check payable
to the “New York State Office of the Attorney General” and forwarded to Devin A. Rice,
Assistant Attorney General, New York State Office of the Attorney General, Labor Bureau,
120 Broadway, New York, NY 10271.
2. The Respondents collectively and independently will comply with all provisions of Article
19 of the Labor Law, 12 NYCRR § 142-2.2, and the Fair Labor Standards Act.
2
Distribution of Settlement Funds
3. The $495,876.70 (the settlement amount less the costs) will be paid by the OAG to
individuals who performed labor at work sites contracted by the Respondents from the week
ending December 28, 1999 to the week ending March 29, 2005, who were referred by a
staffing service, and who worked overtime hours for which they were not compensated in
accordance with 12 NYCRR § 142-2.2. The OAG shall have the discretion to implement a
claims process, including but not limited to, the posting and distribution of notice to potential
claimants on Respondents’ job sites or elsewhere and setting of a claims deadline. OAG
shall also have the discretion to distribute the money paid among the claimants according to
the best evidence available as to their time worked and monies owed.
4. At the end of the claims period implemented by the OAG, which shall under no circumstance
exceed a period of one year from the date that the Respondents make the payment required
by paragraph 1 of this Assurance, all unclaimed amounts shall be returned to the
Respondents to be used for one or more of the following purposes:
a. the purchase of personal protective equipment for use by individuals employed,
subcontracted, or contracted by the Respondents to perform demolition and other labor
for which personal protective equipment may be desirable, or for which personal
protective equipment is required by industry safety standards or law.
b. providing training to management, employees, or subcontractors of the Respondents
concerning the use of personal protective equipment and the regulatory requirements of
the Occupational Health and Safety Act that are applicable to work performed or to be
performed by any employees, independent contractors, subcontractors, or persons
3
contracted to work on job sites of the Respondents.
c. providing training to the management and subcontractors of the Respondents concerning
federal and New York state wage and hour laws.
5. If any unclaimed funds are returned to Respondents pursuant to paragraph 4 of this
Assurance, Respondents shall submit a plan detailing how the unclaimed funds will by
expended, prior to expenditure of such unclaimed funds, for review and approval by the
OAG. Such plan must be submitted to the attention of the Bureau Chief, Labor Bureau,
Office of the Attorney General.
6. Any individual who is eligible for and elects to receive any portion of the settlement amount
provided to the OAG pursuant to this Assurance shall execute a Release in the form attached
hereto as Exhibit “A”, as a condition precedent to such individual’s receipt of the settlement
amount or any portion thereof. No individual will receive the settlement amount, or any
portion thereof, without full and proper execution of the Release. The original of each
executed Release will be provided to counsel for the Respondents no later than 30 days
following execution thereof.
7. The OAG may use any information received as part of its investigation of the Respondents or
any other person or entity in determining distribution of the settlement amount, and the
Respondents agree to assist the OAG with any reasonable request to ascertain the identity of
individuals who may be eligible to claim the settlement amount or any portion thereof.
a. Any requests for information by the OAG to Respondents shall be sent through
Respondents’ counsel, Littler Mendelson, P.C.
4
Monitoring/Future Operations
8. On such occasions as the Respondents use contracted labor to perform demolition or other
construction work through a third-party staffing service (or similar such entity), Respondents
agree as follows:
a. Respondents will institute a protocol to ensure that such staffing service receives sums
sufficient to compensate workers in accordance with all New York State and federal
labor laws, including minimum wage and overtime laws.
b. In the event a third-party staffing service, that provides laborers or workers to
Respondents for work on job-sites contracted to the Respondent, fails to pay such
laborers or workers the mandatory minimum or overtime wages required by law,
Respondents agree they will be financially liable for any such underpayment.
i. Any potential liability created pursuant to the operation of paragraph 8(b) of this
Assurance is not an admission, agreement, or otherwise that Respondents’
relationship with such contracted, third-party laborers or workers is to be construed as
an employer/employee relationship.
Miscellaneous
9. The Respondents agree that they shall not, collectively or individually, seek or accept,
directly or indirectly, reimbursement or indemnification by payment made pursuant to any
insurance policy with regard to any or all of the amounts payable pursuant to this Assurance.
10. Pursuant to Executive Law § 63(15), evidence of a violation of this Assurance by any of the
Respondents shall constitute prima facie proof of violation of Article 19 of the Labor Law,
12 NYCRR § 142-2.2, the Fair Labor Standards Act, and Executive Law § 63(12) in any
5
civil action or proceeding hereafter commenced by the OAG against such Respondent for the
period of the week ending December 28, 1999 to the week ending March 29, 2005.
11. Nothing contained in this Assurance shall be construed to cover any claims of any type by
any other state agency or any claims that may be brought by the OAG to enforce the
Respondents’ obligations, either joint or several, arising from or relating to the provisions
contained in this Assurance. This Assurance does not bind any other federal, state, or local
governmental agency.
12. This Assurance and any dispute thereto shall be governed by the laws of the State of New
York without regard to any conflicts of laws principles.
13. No failure or delay by the OAG in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise therefor preclude any other
or further exercise thereof or the exercise of any other right, power or privilege. The rights
and remedies provided herein shall be cumulative.
14. The Respondents consent to the jurisdiction of the OAG in any action or proceeding to
enforce this Assurance.
15. The Respondents enter into this Assurance voluntarily and represent that no threats, offers,
promises, or inducements of any kind have been made by the OAG or any member, officer,
employee, agent or representative of the OAG to induce the Respondents to enter into this
Assurance.
16. This Assurance may be changed, amended or modified only by a writing signed by all parties
hereto.
17. This agreement, consisting of eight (8) pages, plus Exhibit “A”, and jurat, constitutes the
6
entire agreement between the Respondents and OAG and supercedes any prior
communication, understanding or agreement, whether written or oral, concerning the subject
matter of this Assurance.
18. If any provision of this Assurance is found to be unenforceable, such finding shall not effect
the enforcement of the remaining provisions hereof.
19. This Assurance shall be binding upon the Respondents and their successors, heirs and
assigns.
20. This Assurance shall be effective and binding only when this Assurance is signed by all
parties. This Assurance may be executed in one or more counterparts, each of which shall be
deemed an original but which together shall constitute one instrument.
21. Respondents acknowledge that they have been effectively represented by legal counsel
during this investigation and that they have reviewed this Assurance with their legal counsel,
Andrew P. Marks and Gerald T. Hathaway, Littler Mendelson, P.C., 885 Third Avenue, New
York, New York 10022, prior to execution of the agreement.
7
WHEREFORE, the following signatures are affixed hereto on the dates set forth below.
ACCEPTED:
By: _____________________________
EUGENE H. SKOWRONSKI, as ELIOT SPITZER
President of Advanced Contracting Corp. Attorney General of the State of New York
By: _____________________________ By: _______________________________
JOSEPH P. DONNOLO, as President of DEVIN A. RICE
Reflex Services, Inc. JAMES W. VERSOCKI
Assistants Attorney General
Labor Bureau
NYS Office of Attorney General
120 Broadway, 26th Floor
New York, New York 10271
By: _____________________________ (212) 416-8700
Counsel to Respondents
Andrew P. Marks, Esq.
Gerald T. Hathaway, Esq.
Littler Mendelson, P.C.
885 Third Avenue
New York, New York 10022
8
CORPORATE ACKNOWLEDGMENT OF ADVANCED CONTRACTING CORP.
STATE OF NEW YORK )
) SS:
COUNTY OF ______________ )
On the ___ day of ________, 2005, before me personally came EUGENE H.
SKOWRONSKI, as the President of Advanced Contracting Corp., a New York State domestic
business corporation, to me known who, being by me duly sworn, did depose and say that he
resides at _________________________, that he is the President of Advanced Contracting
Corp., and that he is the individual described in and who executed the foregoing ASSURANCE
OF DISCONTINUANCE PURSUANT TO EXECUTIVE LAW SECTION 63, SUBDIVISION
15, and duly acknowledged to me that he executed the same.
__________________________
NOTARY PUBLIC
CORPORATE ACKNOWLEDGMENT OF REFLEX SERVICES, INC.
STATE OF NEW YORK )
) SS:
COUNTY OF ______________ )
On the ___ day of ________, 2005, before me personally came JOSEPH P. DONNOLO,
as the President of Reflex Services, Inc., a New York State domestic business corporation, to me
known who, being by me duly sworn, did depose and say that he resides at
_________________________, that he is the President of Reflex Services, Inc., and that he is
the individual described in and who executed the foregoing ASSURANCE OF
DISCONTINUANCE PURSUANT TO EXECUTIVE LAW SECTION 63, SUBDIVISION 15,
and duly acknowledged to me that he executed the same.
__________________________
NOTARY PUBLIC